More NewsQuestions for Dana Todd, Executive VP of SiteLab International

Questions for Dana Todd, Executive VP of SiteLab International

A search veteran waxes philosophical on the promise of local search, the pipedream of personalization, and her peevishness toward Yahoo!'s new inclusion model.

Dick Hopple Regular attendees of online marketing conferences know Dana Todd’s face and her contentious stances on many aspects of search engine marketing.

A ten-year veteran of online marketing, Todd has never been one to take changes lying down. She has frequently taken major search engines to task for what she sees as unfair or unnecessarily obtuse practices, ranging from Yahoo’s new pricing model for inclusion services to Google’s restrictive approach to contextual advertising.

Todd got her start as a journalist, and she credits that experience with giving her the ability to thrive in the midst of chaos and ask the tough questions. After switching to agency work in the early nineties, she eventually joined and became a partner in SiteLab International, an interactive agency that has thrived along with past year’s boom in SEM.

In this interview, she shares with ClickZ readers her thoughts on a wide range of topics, including Yahoo’s paid inclusion strategy, the nascent markets for local and personalized search, and what will happen when the behemoth agencies stop paying lip service to SEM and actually start doing it.

Q. What’s the significance of Yahoo’s new pricing structure for inclusion services? What will it mean for you and your clients to pay both a flat fee and a per-click fee?

A.It’s difficult to explain the new structure to small advertisers, particularly those with limited budgets. Up until now, they’ve been thinking, “Ok, I budget this one-time expense and it’s going to last a certain period of time.” Theirs is a calendar and a flat fee mindset. Now you’ve introduced this new element. They’re going to have to pay .15 minimum per click to drive the traffic. Their next question is, “How much will this cost?” I have no way to answer that for them. As an agency, I’m not going to be able to monetize that well. It’s going to be tricky for me to manage, explain and put a solution in place for our clients.

I’m not saying it won’t work for some. But you have to have the kind of business model that’s going to support paying .15 per visitor. Take ClickZ as an example; you’re a publisher. Do you guys make .15 on an eyeball? Most publishers don’t. You may have a lot of advertising, but you’re still probably only going to make .08 per click. If you’re paying for visibility at .15 a click, you’re losing money on Yahoo traffic.

That’s my big problem. They’ve got this flat fee they’re shoving down people’s throats. It bothers me that they have the power to make that kind of decision, because frankly, they control a lot of search inventory.

If our clients want it, then yes, we’ll participate. But it’s going to take a lot more effort.

Q.You dissed hard on contextual advertising six months ago at Search Engine Strategies in San Jose. Where do you stand now?

A.I never said it won’t convert, I just don’t like paying the same price for it.

I still believe contextual advertising is banner advertising with words. I’ve seen statistics showing that while the conversions are similar to search, the clicks are closer to those of banners. I pay a lot less for banner ads than I do for search advertising. For a run of network ad buy, the average CPM is $4 or $6. So why am I paying $2 per click? Just because you tell me it’s relevant?

They should provide the ability for me to track it easily, separate from my other buys, without having to install a third party software — yet another tool — to prove to my advertisers and to myself that it works.

Because if it works I’ll buy more.

We’ve got thousands of keywords out there, and we’re spending quite a lot of money. I’m looking at the total number of clicks coming off our contextual buy, and it’s a pittance compared to our search traffic out there.

Q.What do you think of the opportunities for locally targeted search marketing? What are the obstacles and what do you think the timeline is?

A.Well they’re already in beta, so the timeline is now. [Overture and Google] have both been preparing their products for a while. I don’t know initially if they’re going to pay off big for the engines that are providing them.

It’ll eventually open up a much larger market, but only once it becomes a common buy for the small advertisers. I think they’re going to have a year or so getting traction on that. Small advertisers are just now hearing about search marketing. (The really big advertisers are also just starting to experiment with it. It’s everyone in the middle that’s leading the way.)

Q.How about personalization?

A.I have mixed feelings about personalization. On the one hand, I think: wow, very cool. On a theoretical level, it’d be a great tool to have. But I’ve seen so many great technologies fail in the long run, particularly as commercial enterprises. The problem with personalization is it attempts to automate the human mind. You can’t do that. You just can’t.

Google has done a pretty good job of mapping our social network. But to do that on the level of the individual mind?

Imagine your profile is being built every time you use Google, which for me is probably 85 times a day. Knowing how many personal searches I do in a day, how many different kinds of searches for different clients, I’m sure [my personalized results] would be a muddled mess by the time two weeks had past. It makes the assumptions that people are a certain way all the time.

I think it may work if it were sold as a premium service; for a PDA, or for some very specific purpose. But as a general application, I’m not sure.

Q.What threats does SEM face right now? Is there a risk of a bubble?

A.We’re in the midst of it right now. It’s a small bubble, but it’s a bubble. It’s a piece of the overall bigger bubble, which is that Internet advertising is back. There’s a belief, certainly in our organization, that part of that credibility factor was contributed by SEM. That’s why advertisers are coming back. They’re starting to see results, due to the fact that SEM is so metrics driven.

The threat to us as a whole is primarily ignorance. Ignorance of the business models, and of how to work with us. Also, there’s a threat from the bigger agencies, which have a tendency to squash all SEM outsourcing.

It absolutely behooves the ad agencies to look at how to build search service. They all give lip service to it, but they don’t have a strong understanding yet. If they did get it, they could direct a lot of ad dollars into SEM, and they could make the space grow significantly. So it’s both a threat and a potential boon, depending which way the wind blows.

Ad agencies have the resources to really do SEM well, but it’s different sort of thinking for them.

Q.What’s the big picture for SiteLab’s search business right now?

A.A lot of search agencies are saying, we’ve pretty much maxed out the search market. This happens when you hit the top. If you can buy all the potential inventory in your keyword areas, you start to see a flat line. You have effectively cornered the search engine market share. There is no more, because it is driven by consumer demand.

Their next question to me is, “We want more traffic, so what should we do?” That’s when we start looking at the banners, email and other ad methods.

(And pops sometimes work, by the way. It’s not huge, but it’s good enough. In some cases, because the distribution is so large, pop-ups can be very effective, particularly the very targeted networks like Claria. Not every single one of our tests on Claria has worked, but those that do are very impressive.)

Q.Describe a day in the life of Dana Todd.

A.It feels like chaos, but it’s carefully controlled chaos. I usually spend the first 20 minutes of the day cleaning out spam. The rest of the day I spend putting out fires. At any given time I might be writing copy for a client, analyzing a client’s CPC strategy, or even specifying an ERP software.

It feels like I’m in a pinball machine some days. But I have a very high level of energy. Because of my journalism background, I’m used to the daily deadline. I function very well in this environment. It’s the only thing I’ve known. It’s addictive.

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